Many check-cashing stores also make payday loans-small, high-interest, short-term cash loans. But these small loans can cause big trouble. Here's how:
But what if you don't have the money in your checking account on that date? You can extend the loan, but only if you pay another fee and interest charges. This cycle continues as long as you pay the fees. Because most states have no rules limiting the fees these stores can charge, you could wind up paying anywhere from 450% to 650% in fees and interest charges. That's $450 to $650 to get a $100 loan.
If you decide to get a payday loan, check out www.paydayloaninfo.org, a site operated by the Consumer Federation of America.
If you really need cash to pay for an emergency or a major car repair, you may decide that a payday loan is the best option for you. If so, be a smart borrower. Make sure your payday lender is legitimate and that you understand your repayment responsibilities before you sign on the dotted line. Some suggestions:
Once this financial crisis is behind you, plan for the future by creating a budget which can help you avoid the need to pay high fees to borrow the money you need for emergencies and unforeseen expenses.